4 types of project risks you should know as a project manager

If we need to put a definition of project risk management, we will not find an expressing definition than the following:

“Anything that threatens the ability of person or organization to accomplish its mission”

Simply, Project risk management is a project management activity that involves identifying, assessing, measuring, documenting, communicating, avoiding, mitigating, transferring, accepting, controlling and managing risk.
But to be able to deal with different risks and manage them successfully, you need to identify and go through different types of project risks, so below we will review some types of project risks that may you face in your career
Project Risk

Put simply, project risks are factors that could cause the project to fail. They are the most significant of the risk types and has a number of sub types that need to be considered, these are

  • System or product complexity
  • Client or target environment
  • Team environment
  • Business project risk

Business Project Risk

Along with the overall system complexity there’s also the business project risk which is similar but not the same. It is about the business aspect of the project, not the end result. If the project is moving into a new area that hasn’t been tried or tested, the risk is greater as there’s no indication of how it’s going to be accepted or if it will achieve the goals it’s supposed to. There’s a big difference in replacing a static website with one built with a CMS as opposed to a web application to be used to provide online quotes for insurance products. The factors to look for in business project risks are:

  • The intrinsic complexity of the business product;
  • The level of innovation;
  • The stability of requirements;
  • The required level of quality;
  • The level of compliance to processes or legislationProduction System RiskThe business case for projects often fails to consider the ongoing cost of the solution.
    A simple example is the need for server monitoring and security patches. A better example is the risk faced by not upgrading to the latest version of an application once the version you’re using is no longer supported. But the best example is the training and support required for people using the system and any changes that might be needed. From the client’s perspective, I’ve found that there’s excitement and enthusiasm to get the solution up and running but when it comes to maintenance, it doesn’t seem quite as important. Once it’s up and running, people move on to other projects and soon forget about solution they just delivered. Just like a car, a web application needs regular servicing and tuning. Ignoring this can lead to performance issues if the site is not monitored and maintained. .
  • The things to look for are
  • The provision for support and maintenance
  • The experience of the production support team members;
  • The age of the production system and versions of software
  • The level of supporting documentation and training.Benefits Realization RiskAlthough it’s often forgotten once a project is underway or has been delivered, there is always a reason for the project in the first place. The reason a business undertakes a project is to realize benefits in one way or another, whether it be increase in sales or improving efficiency. It’s all too easy to get caught up in the details of the project and forget the bigger picture, especially when you’re struggling to get content and deliver the project on time.
    What needs to be considered is how realistic it is that the business will get the benefits they hope to achieve – the factors to consider include:
  • The number of different stakeholders, clients and external partners involved
  • The need for culture changes / training / acceptance of the new solution
  • The degree of management buy-in
  • The time-frame for benefits realization; and
  • The size of the benefits to be realized.

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